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Issued: February 19, 2026
On January 16, 2026, the Michigan Supreme Court (MSC) issued an Order declining to review the Michigan Court of Appeals’ (COA) June 20, 2024, decision in Nationwide Agribusiness Ins Co v Dep’t of Treasury, __ Mich App __ (2024) (Docket No. 364790), referred to hereafter as Nationwide. At issue was whether Chapter 12 of the Income Tax Act of 1967 (1967 PA 281; MCL 206.1 et seq.) (more commonly known as the Corporation Income Tax or CIT) authorizes a unitary business group (UBG) of insurance companies to file combined returns for premiums and retaliatory tax liabilities.
The Michigan Corporate Income Tax is composed of three distinct taxes: 1) a tax on C corporations, 2) a tax on financial institutions, and 3) a tax on insurance companies. The general insurance company tax under Chapter 12 is a 1.25% tax on insurance premiums written on property or risk located in Michigan. MCL 206.635. Insurance companies pay either the general insurance company tax or the so-called “retaliatory tax” imposed under section 476a of the Michigan Insurance Code, whichever is greater. MCL 500.476a.
The COA’s Nationwide opinion arose from a dispute between the Department of Treasury and a group of out-of-state insurance companies affiliated with Nationwide Mutual Insurance Company dating back to the 2014 and 2015 tax years. In an opinion reversing a decision by the Michigan Tax Tribunal, the COA interpreted MCL 206.611(5), which defines “taxpayer,” to require that “when a group of companies qualify as a UBG, the UBG, and not the individual companies within the UBG, is the taxpayer and the UBG is required to file a unitary tax return.” Accordingly, the COA ultimately held that, with respect to both the premiums tax and retaliatory tax liability, UBGs are required to file on a unitary basis, calculating and imposing these taxes at the UBG level.
On September 24, 2024, Treasury filed its Application for Leave to Appeal, which was denied by the MSC’s recent Order.
In denying Treasury’s appeal in this case, the holding by the COA in its 2024 decision stands: for purposes of unitary filing under Chapter 12 of 1967 PA 281, the definition of “taxpayer” includes a UBG of insurers. Where a UBG of insurers exists, the UBG must file a unitary return that calculates both the premiums tax and retaliatory tax liabilities at the UBG level. Consequently, insurers may need to review their status as a member of a UBG. For more information on conducting such a review, taxpayers are encouraged to consult Revenue Administrative Bulletin (RAB) 2018-12, available on Treasury’s website, which details the UBG Control Test and Relationship Tests.
The Nationwide decision is published and therefore applicable to all open tax years. For tax year 2025, because the deadline to file returns is upcoming on March 1, 2026, insurers potentially impacted by the holding in this case are encouraged to file an application for an extension of time to file those returns (see Form 4). For tax years prior to 2025, amended returns are not required to be filed solely for compliance with the Nationwide decision, but will be accepted from insurers who may benefit from doing so.
Treasury is evaluating the decision and reviewing the actions that must be taken by it and insurers to comply. Compliance instructions will be forthcoming when Treasury completes its evaluation. Any amended returns that have been filed based upon the result in Nationwide will be processed upon the completion of this evaluation. Further guidance will be published on an ongoing basis as needed.